FUNCTIONS OF

FINANCIAL
MANAGEMENT
Learning Objectives

1. Describe the role of Finance Manager in achieving the primary goal

of the firm.
2. Understand how finance fits in the organizational structure of the
firm.
3. Enumerate the fundamental activities of the Treasurer and the
Controller.
4. Explain how the finance function relates to the other functional areas
of a business.
5. Learn the importance of corporate governance in achieving the goals
of a business organization.
6. Appreciate the importance of ethics in finance.
ROLE OF FINANCIAL MANAGER
Financial Manager Makes Decisions
Involving

Analysis and Aquisition of Utilization of

Planning Funds Funds

Impact on Risk
and Return

Affect the Market

Price of Common
Stock

Lead to
Shareholder’s
Wealth
 The Finance
Organization
The financial management is
usually associated with a top
officer of the firm such as a
Vice President of Finance or
some other Chief Financial
Officer (CFO)
 Board of Directors

Chairman of the Board and Chief

Executive Officer (CEO)

President and Chief Operations

Officer (COO)

Vice President Vice President Vice President

Marketing Finance (CFO) Production

Treasurer Contoller

Cost
Cash Credit Tax
Accounting
Manage Manage Manage
Manager

Financial Data
Capital Financial Accounting Processing
Expenditure Planning Manager Manager
RELATIONSHIP
WITH OTHER
KEY Finance is one of the major functional
FUNCTIONAL areas of a business.
MANAGERS IN
THE The functional areas of business operations for a
typical manufaturing firm are manufacturing,
ORGANIZATION
marketing, and finance.
Manufacturing Marketing Finance

Manufacturing deals Marketing involves Finance is an integral

with the design and the selling, part of total
producting of a promotion, and management and cuts
product. distribution of a across functional
product. boundaries.
Corporate Governance
Corporate governance is the process of
monitoring managers and aligning their
incentives with shareholders goals.
 Monitors

Inside the company

Board of Directors

Outside of the Company

Stockholders Auditors Managers

Analysts

Bankers

Credit Agencies

Government
SEC, BIR, BSP
ETHICAL
BEHAVIOR Ethics are of primary
importance in any
practice of finance.
Finance professionals
commonly manage
other people’s money.

These fiduciary relationships oftentimes create tempting

opportunities for finance professionals to make decisions
that either benefit the client or benefit the advisors
themselves.
 As with any
Strong emphasis on ethical profession with
behavior and ethics training million of
and standards are provided practitioners,a few are
by professional associations bound to act
such as the Finance unethically.
Executives of the
Philippines (FINEX),
Bankers Association of the
Philippines, Investment
Professionals, and so forth.
 Governments all over the
world have passed laws and
regulations meant to ensure
compliance with ethical
codes of behavior.
 GROUP 2

Lara Xein Mary

Bayog Abigail
Graneta